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G-III up 20 Percent on Positive Earnings

Apparel company, G-III Apparel Group (NASDAQ: GIII) is up 20 percent one hour before the close of trading on Tuesday after reporting favorable earnings.

The company manufactures licensed clothing for Calvin Klein, Guess? (NYSE: GES), the National Football League and at least 27 other brands. Its customers include J.C. Penney (NYSE: JCP) and Saks Inc. (NYSE: SKS).

On Tuesday, the company reported a surprise first quarter profit of $0.05–a 200 percent beat from analyst consensus of -$0.05. Revenue was $272.6 million.

Also notable, this was the first time in at least 15 years that the company has profitable during this quarter. Gross margins was up 4 percent as the company sold more full-price products.

How did this happen? The company revamped its business model. In the past, it was heavily dependent on winter weather apparel to drive sales.

In August of 2012, G-III purchased Vilebrequin, a men’s swimwear label and plans to unveil a swimwear collection for women. Also adding to its summer portfolio, it entered into a deal with Calvin Klein parent PVH Corp (NASDAQ: PVH) to manufacture handbags, dresses and swimwear under the label. Along with other acquisitions, the company will soon unveil a collection under the Ivanka Trump name.

CEO Morris Goldfarb said, “Current booking activity and sell-through rates, as well as positive feedback from our retail customers on our upcoming merchandise programs, give us increased confidence in our full-year outlook.”

Disclosure: At the time of this writing, Tim Parker had no position in any of the companies mentioned.

[stock-tools exchange="NASDAQ" symbol="GIII" image_height="180" image_width="300"]

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